Denison Independent Andrew Wilkie says downsizing the redevelopment is not an option.

"If the new Tasmanian Government stops the rebuild or significantly reduces the scope then Canberra would be well within its rights to ask for all or some of the money back," he said.

Mr Wilkie says Tasmania desperately needs the hospital rebuild to go ahead but is urging the Government not to take too long.

"The review that the new government has done is entirely warranted."

"I think the decision to delay any further work for now while the project plan is re-jigged makes sense, so long as that delay is not very long. I'm talking about weeks, not months."

Deputy Opposition leader and former Health Minister, Michelle O'Byrne, is also worried.

"I'm extremely surprised about this decision and I'm very concerned it will attract penalties as part of the agreement."

Former minister defends performance

The State Government is not locked in to deliver the full re-development because the former government had not yet signed a key building contract.

Ms O'Byrne says she was very close.

"Frankly, I would have loved to be able to sign it earlier and politically it would have been great for me to sign a GCS prior to an election period or indeed last year," she said.

"But I wasn't prepared to sign one that didn't give us the best outcome for Tasmania.

"We were very close to getting one that would give us the best outcome for Tasmania, now clearly we're nowhere near it."

The Premier, Will Hodgman, says the Government will detail what it plans to do soon.

"What we're doing is the most prudent thing, after discovering what is an appalling mess left by Labor and the Greens," he said.

"We are seeking appropriate high level advice; the Minister for Health Mr Ferguson is in the process of obtaining that as we speak and the government will make a sensible and appropriate decision in the near future about the way forward."

The Medical Staff Association's, Dr Frank Nicklason, says the uncertainty is taking a toll on staff.

"It is somewhat unsettling to have plans stopped and starting and changing and we're very much hoping that a decision will be made fairly quickly so that we can proceed with those plans," he said.